Preheat the oven to 375 degrees and prepare a 9x13 baking pan with cooking spray. Set aside.
In a small frying pan over medium heat, melt 1 Tablespoon of the butter and add the onion. Cook slowly over medium heat until the onion starts to turn golden brown. (About 3-5 minutes) Remove from heat and set aside to cool. Once cooled, blot the onions to remove as much moisture as possible.
In a large mixing bowl, whisk together the flour, granular sugar, yeast, salt and onion powder until well combined. Set aside.
In a microwave safe small bowl combine the milk, water and 2 remaining Tablespoons of butter. Heat in the microwave in 20 second intervals until the temperature reaches 120-130 degrees.
Move the heated milk mixture to a larger bowl and combine with ½ cup of the flour mixture. Use an electric mixer on low speed to mix until combined.
Add about ½ cup of the prepared, blotted onions and continue mixing until fully incorporated.
Slowly add the remaining flour, ½ cup at a time until the dough resembles a thick and slightly sticky playdough.
Move the prepared dough into the bowl of a stand mixer and use the dough hook to knead for 6-8 minutes on low. Alternatively, you can knead the dough by hand on a prepared floured surface. The dough is ready when you can press it and it returns back to shape.
Cover the dough and move to a warm area to rest for about 10-15 minutes, the dough will rise slightly.
Separate the dough into 12 evenly sized rolls and shape if needed. Place them in a prepared dish.
Cover and set aside to rise for about 20-30 minutes.
Melt the remaining butter and add the remaining onions to it. Brush this mixture over the rolls until the tops are completely coated.
Bake for 25-30 minutes or until the tops are golden brown and the rolls are baked through.
It is really important that you blot the onions with paper towels to remove as much excess moisture as possible. Too much moisture and your rolls will not rise. Do not skip this step!
Store rolls in a resealable plastic bag at room temperature for up to 3-4 days. Do not store in the fridge or they will dry out much faster.
To freeze, wrap them in plastic wrap and then place into a freezer bag. Freeze for up to 6 months and thaw on the counter.